Texas Instruments (TXN) Receives Buy Rating from UBS with $250 Price Target: Analysts Bullish on Analog Segment Recovery
UBS reaffirmed its Buy rating on Texas Instruments (NASDAQ: TXN) stock, setting a price target of $250.00. The firm's positive stance follows Texas Instruments' capital management discussion, highlighting the company's flexibility in capital expenditures for 2026 and beyond. Analysts praised Texas Instruments' strategy, particularly its potential to regain pre-COVID market share in the analog segment, which could lead to significant growth.
According to UBS, every 1% of market share regained could add approximately 5-6 percentage points of unique growth from the current low point. This recovery is seen as a counter to prevailing investor skepticism, especially regarding competition from Chinese firms. UBS also emphasized Texas Instruments' competitive edge in the Chinese market, attributing it to a cost position expected to improve further under the company's current plan.
In terms of financial valuation, UBS pointed out that Texas Instruments' free cash flow (FCF) per share could reach approximately $10 in a mid-point revenue scenario, surpassing both UBS's model and the consensus estimate. Additionally, new commentary regarding "maintenance" capital expenditures suggests the potential for increased FCF to around $14 per share in a more favorable scenario.
While UBS slightly increased its estimates for Texas Instruments' earnings per share (EPS) and FCF per share for 2025 and 2026, the price target remains unchanged at $250. The firm's analysis indicates confidence in Texas Instruments' strategic direction and financial prospects.
Recent news also highlights Texas Instruments' positive trajectory, with Citi upgrading the stock rating from Neutral to Buy and significant strides in financial performance. The company's projected free cash flow per share by 2026 exceeds analyst consensus estimates, further solidifying its position in the market.
In conclusion, Texas Instruments' strategic investments and financial performance, along with insights from UBS and InvestingPro data, provide a comprehensive view of the company's market standing and growth potential. For investors interested in TXN shares, additional insights and tips are available through InvestingPro for well-informed decision-making.
Analysis:
- UBS reaffirms Buy rating on Texas Instruments with $250 price target, citing growth potential in analog segment
- Company's ability to regain market share in the analog sector seen as key driver of growth
- Financial valuation indicates strong free cash flow per share and potential for increased earnings
- Recent upgrades and positive trajectory underscore Texas Instruments' strategic investments and performance
- InvestingPro data and tips offer additional insights for investors to make informed decisions on TXN shares